Correlation Between Bausch Health and Primaris Retail
Can any of the company-specific risk be diversified away by investing in both Bausch Health and Primaris Retail at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bausch Health and Primaris Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bausch Health Companies and Primaris Retail RE, you can compare the effects of market volatilities on Bausch Health and Primaris Retail and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Bausch Health with a short position of Primaris Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and Primaris Retail.
Diversification Opportunities for Bausch Health and Primaris Retail
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bausch and Primaris is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and Primaris Retail RE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primaris Retail RE and Bausch Health is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Bausch Health Companies are associated (or correlated) with Primaris Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primaris Retail RE has no effect on the direction of Bausch Health i.e., Bausch Health and Primaris Retail go up and down completely randomly.
Pair Corralation between Bausch Health and Primaris Retail
Assuming the 90 days trading horizon Bausch Health Companies is expected to generate 3.3 times more return on investment than Primaris Retail. However, Bausch Health is 3.3 times more volatile than Primaris Retail RE. It trades about 0.02 of its potential returns per unit of risk. Primaris Retail RE is currently generating about -0.09 per unit of risk. If you would invest 1,104 in Bausch Health Companies on August 29, 2024 and sell it today you would earn a total of 6.00 from holding Bausch Health Companies or generate 0.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bausch Health Companies vs. Primaris Retail RE
Performance |
| Timeline |
| Bausch Health Companies |
| Primaris Retail RE |
Bausch Health and Primaris Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Health and Primaris Retail
The main advantage of trading using opposite Bausch Health and Primaris Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Health position performs unexpectedly, Primaris Retail can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Primaris Retail will offset losses from the drop in Primaris Retail's long position.| Bausch Health vs. Gildan Activewear | Bausch Health vs. Open Text Corp | Bausch Health vs. Waste Connections | Bausch Health vs. CCL Industries |
| Primaris Retail vs. SmartCentres Real Estate | Primaris Retail vs. Dream Industrial Real | Primaris Retail vs. RioCan Real Estate | Primaris Retail vs. Algonquin Power Utilities |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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